ImageWare Systems Announces Preliminary Fourth Quarter and Year End 2006 Results.- Fourth Quarter Revenue up 10% Compared to Last Year's Quarter - - 2006 Revenue up 11% - SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- ImageWare[R] Systems, Inc. (AMEX AMEX See: American Stock Exchange :IW), a leading developer and provider of identity management solutions, today reported preliminary financial results for the quarter and year ended Dec. 31, 2006. "Our focus on building relationships with major system integrators produced important wins with GE Security, Unisys Corporation (company) Unisys Corporation - The company formed in 1984-5 when Burroughs Corporation merged with Sperry Corporation. This was when the phrase "dinosaurs mating" was coined. , Computer Sciences Corporation and others in 2006," stated Jim Miller Jim Miller may refer to any of the following individuals:
Miller continued, "With our solid foundation of quality identity management software and our expanding partnerships, we are very optimistic we will gain more traction in 2007. Already this month, we entered into a large scale opportunity with Honeywell via a three-year, royalty-based licensing agreement to integrate IWS See iPlanet Web Server. [TM] biometric enrollment and identity proofing, as well as card management and the issuance of biometrically-enabled secure credentials into Honeywell's physical access control product suite. In addition, government mandates, such as Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States Presidential Directive Noun 1. Presidential Directive - a directive issued by the President of the United States; usually addressed to all heads of departments and agencies directive - a pronouncement encouraging or banning some activity; "the boss loves to send us directives" 12 (HSPD-12), a directive requiring a common identification standard for all Federal government employees and contractors, continue to drive demand for ImageWare's open architecture and interoperable technologies Founded in 2003, Interoperable Technologies is a limited-liability company (LLC) working to create a "dual-mode" satellite radio receiver that is capable of accessing both services operating in North America. . We are seeing corporations begin to use HSPD-12 as a standard as the private sector begins to upgrade their identity management security systems." Total net revenues for the fourth quarter 2006 were $2.4 million, compared to $2.2 million for the fourth quarter 2005. Fourth quarter 2006 operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. totaled $2.8 million, compared to $3.9 million in the fourth quarter 2005, which included a $450,000 charge to bad debts, a $257,000 expense to provide for the shut down of the company's German office, and a $253,000 impairment charge. The loss from operations in the fourth quarter 2006 totaled $1.2 million, compared to loss from operations of $2.8 million in the fourth quarter 2005. The company is finalizing the Series C Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". accounting treatment associated with the financing completed in November 2006. Therefore, the company has not included the net loss, loss per share or balance sheet data in this release. For the full year 2006, total net revenues were $10.2 million, compared to $9.2 million for 2005. Loss from operations for 2006 was $5.1 million, including $711,000 in charges for the expensing of stock options related to the implementation in 2006 of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R, compared to $6.9 million for 2005 that did not include SFAS 123R-related expense. As of Dec. 31, 2006, ImageWare Systems had cash of $939,000. And as announced on March 12th, subsequent to the year end close, the company raised approximately $1.5 million through a private placement. Financial Guidance Miller concluded, "Although the first quarter of 2007 has been one of the busiest in the company's history in terms of business activity, in terms of orders and revenue we expect it to be down from the fourth quarter of 2006. However, we are seeing strong indications the increased activity will result in a significant increase in orders beginning in the second quarter of 2007. We anticipate these orders will begin to convert to revenue during the second quarter and will enable us to achieve quarterly run rates in the second half of 2007 near or above breakeven levels in terms of both net income and cash flow. We expect an inflection point Inflection Point An event that changes the way we think and act. -Andy Grove, Founder of Intel. Notes: For example, the fall of the Berlin Wall was an inflection point in global politics and the commercialization of the Internet was an inflection point in technology. in our business in mid-2007, as a result of market adoption, market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" through partners and recognition of the benefits of our product offering." Fourth Quarter and Recent Corporate Highlights March * Closed a $1.5 million private placement. * Retired outstanding debt that totaled $1.2 million as of December 31, 2006. * Signed a three-year, royalty-based licensing agreement with Honeywell Security to integrate biometric enrollment and identity proofing, as well as card management and issuance of biometrically-enabled secure credentials, into Honeywell's physical access control product suite. February * Announced Unisys Corp. selected the IWS[TM] Biometric Engine[TM] to be a part of the Registry and Positive Identification Solution (RAPIDS rapids Noun, pl part of a river where the water is very fast and turbulent rapids npl (GEO) → rápidos mpl rapids rapid npl (Geo ) and HSPD-12 ID solutions on display in the Unisys Center of Excellence (COE See common operating environment. ) in Reston, VA. January * Awarded two new orders totaling $280,000 for its IWS Biometric Engine multi-biometric identity management platform from an undisclosed U.S. Federal Government agency and a large systems integrator. * Announced Computer Sciences Corporation selected the IWS Biometric Engine to be a part of CSC's Border and Immigration immigration, entrance of a person (an alien) into a new country for the purpose of establishing permanent residence. Motives for immigration, like those for migration generally, are often economic, although religious or political factors may be very important. Solutions (BIS) Center of Excellence. December * Awarded a contract valued at approximately $1.2 million from an undisclosed Federal Government agency to develop a multi-biometric identity management prototype solution. * Awarded a contract valued at approximately $288,000 to enhance the multi-biometric identification system the company initially developed in 2004 for the Secretaria de Relaciones Exteriores (SRE SRE Secretaría de Relaciones Exteriores (México) SRE Sex and Relationship Education SRE Serum Response Element (biochemistry) SRE Software Reliability Engineering SRe Seychelles Rupee ), the Mexican Ministry of Foreign Affairs. November * Announced an order valued at approximately $275,000 from GE Security for an undisclosed project, demonstrating the continued momentum of its partnership with GE Security. * Closed a $2.3 million private placement. Conference call information A conference call on ImageWare's fourth quarter and year end earnings will be conducted today at 8:00 a.m. Pacific Time (11:00 a.m. ET) and available to all interested parties by dialing 877-407-9210 in the U.S. or 201-689-8049, if outside of the U.S. The call will also be available through a live audio Web broadcast at www.iwsinc.com/investors.cfm and http://www.vcall.com/IC/CEPage.asp?ID=115343. The call will be archived and available for replay from the investor relations Investor relations The process by which the corporation communicates with its investors. page of ImageWare's Web site at www.iwsinc.com or at www.vcall.com, until March 30, 2008. The call will also be available for replay via the phone until April 3, 2007 by calling 877-660-6853 in the U.S. or 201-612-7415, if outside of the U.S. To access the call, all parties will need the following replay pass codes: Account #286 and Conference ID #236461. About ImageWare Systems, Inc. ImageWare Systems, Inc. (AMEX:IW) is a leading developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. Scalable for worldwide deployment, the Company's biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint Livescan and investigative capabilities. ImageWare is headquartered in San Diego, with offices in Washington DC and Canada. For more information visit www.iwsinc.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This news release may contain forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. While these statements are meant to convey to the public the Company's progress, business opportunities and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. While management believes such representation to be true and accurate based on the information available to the Company, actual results may differ materially from those described. The Company's operations and business prospects are always subject to risks and uncertainties. Important facts that may cause actual results to differ are set forth in the Company's periodic filings with the U.S. Securities and Exchange Commission. [TABLE OMITTED] |
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